The choice of software license type depends on some critical factors
The decision on whether to choose a subscription license model as compared to a perpetual license when it comes to project management software rests on the requirements of your particular organization. A subscription pricing model with ongoing payments can be appropriate in certain situations, where a low financial barrier to entry is required, for example, however there are also specific advantages to the perpetual model which might make that choice more attractive.
Often the decision on which to choose is left down to cost, but there are other considerations related to the two models which should also be taken into account.
Subscription vs Perpetual: What’s the difference?
In a subscription software model, the customer accesses software owned by the vendor via an ongoing agreement, and pays regular amounts to access the software. The vendor retains ownership of the software.
In a perpetual license software model, the client buys the software outright. This means that they own the software for the lifetime of the product, albeit sometimes retaining an agreement with the vendor regarding annual maintenance and upgrades that are usually needed on an ongoing basis.
The Pros and Cons of Subscription and Perpetual Licenses
The main advantage of a subscription model from a cost point of view is the relatively low upfront cost of accessing the software. That’s because the payment required will just be the monthly or annual fee to use the software, and not the cost of buying it outright.
The downside of the subscription model, however, is that the client is often at the mercy of price changes from the vendor in subsequent charging periods. If you base your activities on the use of a particular software and the vendor then increases the price of that software then it may feel like you’re tied into the higher prices, with no realistic option to change supplier. Also, you may be tied into a contract for a number of months or years which might be difficult to break, with the added difficult of potentially needing to buy licences back at the end of the subscription period,
Conversely, the cost advantage of choosing a perpetual license arrangement is the long term value you receive, despite having a higher initial cost due to purchasing the software outright. The exact tipping point as to when the perpetual license produces cost savings is dependent on many factors, including the equivalent subscription cost, and any additional charges for maintenance and hosting.
A long-term intention to use the software is likely to mean that a perpetual license mayl represent better value for money, as the higher upfront purchase cost could be offset by the lack of subscription charging moving forward.
Customization of the product
With subscription software, there may be some elements built into the software which you can configure to your own requirements. By and large, however, a subscription product is provided as an ‘off-she-shelf’ solution. This means that it may not be possible to make changes to the software specific to your own business and reduces the chance of customization.
Purchasing a perpetual license means you will likely have more control over the software. This may be because it’s hosted locally, or by a third party who can provide support and assistance with data integration and customization issues. The result of this ability to customize is a software solution that will integrate more seamlessly with your existing solutions and platforms.
A subscription-based software arrangement will come with the stipulation that the vendor will provide the hosting. They remain the owners of the software and do not sign over control to local IT departments. While vendor hosting arrangements are normally secure and reliable, they do come with the downside of being beholden to their customer service arrangements. It can sometimes be difficult to get immediate help and assistance when problems arise.
A perpetual license normally allows hosting to sit wherever the client wishes. This might be within the client organization itself, or within an expert third party such as DRMcNatty. This brings the advantage of more control over the implementation and deployment of the software, although it does introduce the need to negotiate upgrades as and when they are rolled out by the vendor.
Perpetual licenses may represent better value long-term
There is a place for both subscription and perpetual license models depending on the circumstance, however if you’re considering a long-term arrangement, then it’s likely that a perpetual license will represent better value for money. Perpetual licenses also offer the chance to introduce more customization to a product, and offer the ability to choose a hosting provider with a great customer service record.
At DRMcNatty our customer service record sets us apart, and we offer significant benefits from our own hosting solutions. Get in touch today for a conversation about how our expertise can help you make the correct software license choice.